South Africa's economic data revealed an uneven performance this past week, with weak manufacturing and business confidence offset by stronger tourism and vehicle sales, while the local currency held firm in spite of international Brent Crude oil prices surging to highs of over $90 a barrel.
The week kicked off with South Africa’s PMI reading declining for a fourth straight month.
South Africa’s Absa Purchasing Managers’ Index fell to 45.8 in August, its lowest reading of 2026, as business activity and new sales orders weakened. Economists said subdued domestic demand remained a key concern, although improved six-month expectations offered some hope.
The seasonally adjusted Absa Purchasing Managers’ Index (PMI) declined from 46.8 points in July to 45.8 points in August.
This marked the fourth consecutive monthly decline and the lowest reading so far this year, signalling a weak start to the second half of 2026. A reading below 50 indicates contraction.
Tourism, a key economic driver in the country, showed a more favourable reading, with international tourist arrivals increasing by a robust 12,5% year on year in July 2026, but hospitality industry representatives said accommodation occupancy rates have not yet fully recovered in some market segments.
Statistic South Africa’s latest international tourism release indicated strong growth in international arrivals, which Tourism Minister Patricia de Lille and tourism associations have welcomed.
Stats SA said 3 154 725 traveller movements, arrivals, departures and transits, were recorded at South African ports of entry and exit in July 2026.
“Overseas tourists accounted for 19,5% of all tourists, or 193 637 visitors. Holidays remained the main purpose of travel, with about 97,5% of tourists visiting South Africa for holiday purposes.”
Business confidence steady, but remains subdued
South African business confidence remained subdued in the third quarter of 2026, with the RMB/BER Business Confidence Index (BCI) slipping by one point to 38, underscoring the persistent strain facing companies despite some easing in input-cost pressures.
The latest reading means that 62% of businesses surveyed remain dissatisfied with prevailing business conditions.
It also leaves confidence below its long-term average of 40 and well off the 47 recorded in the first quarter, when sentiment was buoyed by improving economic conditions.
The survey, conducted between 13 and 24 August, suggested that the sharp deterioration in confidence seen in the second quarter has stabilised rather than been reversed.
“The latest result suggests the sharp eight-point decline in confidence recorded in the second quarter has neither deepened nor been reversed,” the RMB/BER Index said.
Measures to boost economy
The most positive data release, however, was the surge in August of new car sales increasing by just over 11%.
South Africa's vehicle sales data is often used as one of the measuring sticks for the health of the country's economy.
The Automotive Business Council (naamsa) report released on Tuesday showed South Africa's new vehicle market sustained strong momentum in August 2026, with aggregate sales increasing by 11,4% year-on-year to 57,898 units.
"However, vehicle exports declined by 11,9% to 35,091 units, reinforcing the need to strengthen industrial competitiveness and translate improving domestic demand into local production, localisation, investment and employment," naamsa stated.
Passenger-car sales increased by 11.6% year on year to 41 216 units, while light commercial vehicle sales rose by 11% to 13 727 units.
Steel tariff measures
Meanwhile, South Africa introduced provisional anti-dumping measures on certain Chinese steel imports, but economists warn the move could also increase costs for manufacturers and consumers across the economy.
The International Trade Administration Commission of South Africa (ITAC) has imposed provisional anti-dumping duty measures of up to 28.11% on colour-coated steel imported from China following an application by ArcelorMittal South Africa, which alleged that Chinese producers were dumping the product into the Southern African Customs Union (SACU) market.
The provisional measures, which were implemented by the South African Revenue Service (SARS) on 28 August 2026, will remain in place for six months.
South Africa also stepped up its fight against Foot and Mouth Disease (FMD), with more than 23 million vaccine doses imported as the government and the agricultural sector work to protect livestock, stabilise supply chains and safeguard export markets.
Minister of Agriculture Willie Aucamp said the progress demonstrated the value of closer cooperation between government and organised agriculture, particularly as the sector faces disease outbreaks, regulatory challenges and the need to expand international trade.
The rand and oil prices
The rand has maintained recent stability against the US dollar, as the weaker greenback helped support the rand despite domestic local economic pressures.
Brent crude experienced a notable rise this week as it edged up to about $95 a barrel on Wednesday morning, remaining at those levels until the week ended.
This marked a more than 4% increase as the confrontation between the US and Iran reignited inflation worries.
Gold prices traded around $4,298 an ounce.
The rand ended the week trading at R15.98 against the US dollar, R18.58 against the euro and R21.62 against the British pound.
ashley.lechman@nationalmg.co.za